Despite
their different political affiliations and ideologies, Colombian President Juan
Manuel Santos, former Brazilian President Lula da Silva, and former Peruvian
President Alejandro Toledo have one rather damning connection: their futures are
tied to the construction company responsible for the biggest corruption scandal
in history.

Just months after becoming the world’s newest Nobel Peace Prize
laureate, Santos received last week the questionnaire from the National
Electoral Council (CNE) to respond to allegations that he
received illegal campaign funds from Brazil’s Odebrecht. Lula, who also was in
court last week on bribery-related accusations in connection with a
different construction company, was also recently implicated in more than one
scheme of the Odebrecht scandal, which could dampen his 2018 presidential bid.
Toledo, on the other hand, was ordered to pre-trial detention for allegedly
receiving $20 million in bribes from the construction behemoth, though he has
been allegedly on the run since. Interpol issued a
red-alert notice to 190 member countries in an attempt to capture him, but Toledo, who is likely in California, can’t be
detained unless a US judge approves his capture. Toledo has, however, communicated
through social media affirming his innocence and declaring he is being
persecuted for his anti-poverty ideologies by his “political enemies who do not
believe in democracy, who believe they must take away the rights of the poor -
the right to learn to fish.”

Odebrecht employees and representatives have admitted to
bribing government officials and political parties across three continents,
particularly Latin America, in schemes starting as early as 2001 to win public
sector contracts. The construction firm's CEO Marcelo Odebrecht is serving
a 19-year prison sentence, following last year’s conviction for paying
more than $30 million in bribes to executives of Brazil's state-run oil company
Petrobras. However, what started as a country-wide investigation, dubbed Operation
Car Wash (Operação Lava Jato) in Brazil, has turned into a
tsunami engulfing Latin America with no signs of retreating in sight. The
biggest shock came in December when Odebrecht, together with Braskem, a
Brazilian petrochemical company, pleaded
guilty to bribery charges in the United States, paving the way
for the the largest anti-corruption settlement in history: the two
companies agreed to pay a combined total penalty of at least $3.5 billion to
authorities in Brazil, the United States, and Switzerland. As a result of the
plea agreement, Odebrecht executives began to confess to bribery arising from
the company’s contracts in fellow Latin American countries and evidence of the
corruption cascaded down across the continent.

Odebrecht pleaded guilty to bribery charges in the United States, paving the way for the the largest anti-corruption settlement in history.

Brazilian roots

The scandal in Brazil in entering its fourth year of
spotlight since investigations ended the company’s undetected corruption
streak. Operation Car Wash has since unearthed evidence of $349 million in
bribes in the country and has partly contributed to the impeachment of former
President Dilma Rousseff by garnering public support against her government.
Accusations also extend to Dilma’s vice president and now current president,
Michel Temer, who could lose his mandate if the pair is convicted of accepting
bribe money from Odebrecht and other construction firms to finance their 2014 campaign. Dilma and Temer, political foes
since the impeachment as his party was responsible for opening the proceedings,
will face trial together schedule to begin June 6, a process that could last a year before a verdict is reached. To heighten the political
insecurity in Brazil, the three next men in line to succession have also been
implicated in bribery allegations by an Odebrecht executive.

Next year’s
elections may seem like an opportunity for a new beginning, but the growing
number of accusations against high-profile politicians, especially those against
Lula who remains a popular
figure in Brazil and asserts he is illegitimately being targeted for political
reasons, offers little solace. Among other reasons, having Lula out of the race
could further empower right-wing extremist Jair Bolsonaro, an evangelical known
for his hate
speeches against women, blacks, indigenous people, members of
the LGBTQ community, and other minorities.

Odebrecht’s grip across Latin America

Odebrecht has confessed to paying $98 million in bribes
to the governments of Venezuela's Hugo Chávez and of his successor Nicolás Maduro over
the last decade. If the allegations are true, Venezuela has received the most
bribes from the construction group outside of Brazil. Next on the list is
Panama with $59 million for which 17 executives and former officials have been
charged while President Juan Carlos Varela has been accused. Varela, who had
been advocating for proposed charges to be filed, became implicated in February
by one of the partners of Mossack Fonseca —the law firm at the center of
last year's Panama Papers scandal —who said Varela admitted to him he accepted
bribes from Odebrecht, accusations Varela has denied. Peruvian authorities,
similarly to Varela, had been taking aggressive measures to fight
Odebrecht-related corruption involving $30.4 million in bribes until their own
names became implicated. Toledo, as well as former President Alan García, are
being investigated by Operation Car Wash while a third former president,
Ollanta Humala, has been implicated by Marcelo Odebrecht himself, but he has not
been named in the investigations.

In Guatemala, where $18 million
in bribes is estimated, investigators have cited ex-President Otto Pérez
Molina, ex-Vice President Roxana Baldetti – both of whom are currently in
prison for unrelated charges – and former Minister Alejandro Sinibaldi, who has
been on the run since last year in connection with another investigation.
Similarly to the situation in Brazil, the accusations against Colombia’s Juan
Manuel Santos could tarnish next year’s election, given that Santos’ political
opponent, Oscar Iván Zuluaga, as well as businessmen,
congressmen, ministers, and other high-profile politicians have become implicated
in the investigations relating to suspected $11 millions in bribes in Colombia,
leaving little untainted names on the table for the candidacy.

The next immediate step is to put pressure on the Brazilian Congress to approve anticorruption measures prosecutors presented to Congress in 2015, policies that lawmakers continue to stall.

Besides the countries whose top leaders are facing direct
Odebrecht-stained accusations, investigations have also reached other Latin
American countries unearthing accusations against business executives and lower-level
officials. Trailing behind Venezuela’s hefty sum is the Dominican Republic with
$92 million in admitted bribes by Odebrecht, in which local company representatives
have been cited. The bribery amount in Argentina is estimated at $35.5 and
incriminates a former minister, Julio de Vido, and the director of the Federal
Intelligence Agency and a member of President Mauricio Macri’s inner circle, Gustavo Arribas. Both denied
all accusations. In Mexico, the amount cited totals $10.5 million and
incriminates Mexico’s state-run oil company, Pemex, though no names have been
cited yet by investigators. Lastly, though bribe estimates for Ecuador reach
$33.5, investigations have moved slowly and no one has been accused.
Investigation efficiency could improve as a result of the newly formed cooperative
between Ecuador and Colombia to investigate Odebrecht-related crimes in both
countries.

What needs to be done

When $787 million in bribes spanning 11 countries goes
unnoticed for more than a decade, it points to a sequence of systematic
deficiencies that allows for such corruption to flourish. In response to the
Odebrecht scandal, the secretariat of Transparency International issued five
specific recommendations to help combat it, most of which focuses on
increasing transparency and coordination between different task forces. But a
critical recommendation put forth by the watchdog group states that agents and
companies accused of facilitating or funding corruption schemes, such as the
Panamanian law firm Mossack Fonseca and Brazil’s National Development Bank
(BNDES), should be sanctioned and the resources generated by fines and
settlements should be used to fund corruption prevention programmes, social
accountability and educational outreach, similar to the Siemens Integrity
Initiative established by the German company after its corruption and bribery
scandal, an initiative that has yielded results.

On the positive side, prosecutors from 10 Latin American countries
plagued by the Odebrecht scandal signed earlier this year in Brasilia a joint
cooperation agreement to investigate bribery schemes across the region, an
initiative Transparency International has lauded. The next immediate step is to
put pressure on the Brazilian Congress to approve anticorruption measures prosecutors presented to Congress in 2015, policies that
lawmakers continue to stall and that Transparency International deems
“indispensable to avoid impunity and assure a positive outcome of
these investigations.” Whether authorities will listen to these policy
recommendations is unclear, but investigations continue to unravel despite top-down barriers, which at
least points to progress.

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